Lebanon's government fell late on Friday adding more instability to an already volatile region straining to cope with the fallout from Syria's civil war.

Prime Minister Najib Miqati announced the resignation of his 30-strong cabinet when it failed to make decisions on the extension of a security chief's role and the make-up of a commission that would oversee elections due in June.

Though ostensibly local, the issues that brought down the government had both regional roots and implications. The country's parliament has remained bitterly divided on most issues in the two years since the elected prime minister, Saad Hariri was ousted by a Hezbollah-led bloc, known as March 8, which now holds the majority of seats.

The remnants of the Hariri bloc, known as March 14, has effectively been in opposition ever since and had pushed for a continued role for the Internal Security Forces chief, Ashraf Rifi, who it sees as its last remaining link to Lebanon's security establishment after the assassination last October of the intelligence general, Wissam al-Hassan.

Miqati's attempts to act as a conduit for the deeply polarised groups had largely failed and he had twice before threatened to resign. David Cameron personally intervened when Miqati tried to quit in the wake of General Hassan's death, underscoring the depth of British support for his government and fears of what may follow if it fell.

Britain's ambassador to Lebanon, Tom Fletcher, said: "Najib Miqati has done one of the world's toughest jobs with great tenacity and skill, at a time of immense challenges. It is now important that Lebanon's leaders work together to forge a clearer national vision, and to manage contagion from the Syria crisis. We should help them brace themselves against the challenges they face."

Lebanese leaders immediately tried to douse talk of a vacuum in the country where state control has been sorely tested as the Assad regime's hold on Syria has steadily disintegrated.

In a televised address, Miqati said: "There will be no rescue [for Lebanon] except through dialogue and making room for the formation of a salvation government in which all groups are represented." His resignation is expected to be accepted by President Michel Suleiman on Saturday and a caretaker government appointed.

Gunfire echoed through the centre of Miqati's home city of Tripoli, with Sunni groups battling an Alawite enclave in the Jabel al-Mohsen district. Enmity between the groups is stoked by the Syria crisis, with the Alawites staunchly backing Assad and the Sunnis vehement supporters of the Syrian opposition.

Hardening sectarian positions in the region and a spillover from Syria had threatened to make this year's planned elections more bitterly fought than ever. Neither bloc has been prepared to compromise on the formation of a commission to oversee the election, or whether it is contested on a law drafted in the 1960s or new legislation. Lebanon's sectarian demographics have shifted drastically in the decades of war and emigration.